Riverhouse resort owners notified the city of Bend Monday morning that they have asked the state courts to intervene in their bid to expand the hotel complex along the Deschutes River.

River’s Edge Investments, which owns the Riverhouse, filed suit against the city Friday in Deschutes County Circuit Court, asking that a judge overturn the city’s denial of a roughly $20 million expansion of the Riverhouse resort on a 22-acre parcel adjacent to its existing development.

The expansion has been more than two decades in the making.

City planning commissioners and a hearing officer put a halt to the plans earlier this year when they turned down the land use application from River’s Edge Investments, a family-owned business that also developed the River’s Edge golf course.

The city council had hoped to have a chance to review the denials. Instead River’s Edge opted to file suit under a law designed to protect the rights of property owners that will sunset at the end of December.

”It was a situation where we needed to protect the rights of our clients. We couldn’t give that up,” said Elizabeth Dickson, an attorney with in Bend law firm Hurley, Lynch and Re.

Dickson said Riverhouse owners are prepared to break ground on the expansion, which includes a 38,000-square-foot convention center, a free-standing restaurant, condominiums and additional motel units.

When constructed, the expansion will generate new jobs and draw additional business and tourists dollars to Bend, said Dickson.

Opponents however, have argued that the development creates more problems than benefits.

Bend attorney Greg Hendrix represents about two dozen nearby homeowners opposed to the project.

Hendrix said Riverhouse owners have focused on the question of whether the convention center is a permitted use under the present zoning code without addressing the larger issue of compatibility.

”(Zoning) is an issue, and it’s a problem for them,” said Hendrix. ”But really the problem is they are trying to put 10 gallons of development in a four-gallon bucket.”

That kind of concern led both the planning commission and a hearing officer to deny River’s Edge application for expansion.

Among other things, hearing officer Karen Green found the proposed expansion created potential traffic problems and conflicts with pedestrians around the Riverhouse. Green also upheld the city’s assertion that a convention center is not a permitted use inside commercial limited zoning. That zoning category guides land use on the proposed site.

Riverhouse owners counter that the city has failed to deal in good faith. Dickson said the city has an obligation to recognize Riverhouse’s right to expand based on a 23-year-old agreement with the city.

That agreement spelled out the terms of city approval for the project along with a list of conditions, including the dedication of open space and road construction.

Dickson said the owners of Riverhouse met all the conditions, spending some $3 million on public improvements to the area.

The city, she said, has an obligation to hold up its end of the deal by approving Riverhouse expansion plans. Those plans have been updated to reflect owners awareness of wildlife issues on the river and changing design standards.

”I think we’re smarter and older and, hopefully, we’ve learned something in the last 23 years,” said Dickson.

Riverhouse owners, however, remain interested in working with the city to resolve the issues, said Dickson. With the lawsuit filed, she said the developers want to reopen negotiations with the city on the project.

”Now that the lawsuit is filed there is nothing to say we can’t sit down and talk,” said Dickson. ”And that is what we would like to do.

Mayor Oran Teater said he endorses the concept of a privately-funded convention center but reserved comment on the Riverhouse proposal because of the lawsuit.

”We want the community to have a convention center and I can tell you as someone who worked on a feasibility study for one of these using public money that private money is the way to do it,” said Teater.

The city has 30 days to answer the lawsuit.

Eric Flowers can be reached at 541-383-0323 or eflowers@bendbulletin.com.